Archive for the 'Chattanooga Market Conditions' Category
Housing Plan Unveiled - Chattanooga waits
Categories: Chattanooga Market Conditions, Mortgage and Finance
By Angel Sherlin, Greater Chattanooga Lending
Fears about the economy led to a stock market decline and pushed mortgage rates a little lower during the week. Even with Tuesday’s passage of the new $787 billion stimulus plan, economic growth forecasts from Wall Street economists and from the Fed were revised lower.
Wednesday, President Obama announced the $275 billion Homeowner Stability Initiative, which contained broad outlines of three major elements intended to help prevent foreclosures and falling home values. First, the government will make it easier for many borrowers who currently may not be able to refinance their loans to refinance. Only existing owner-occupied loans owned or guaranteed by Fannie Mae or Freddie Mac are eligible for consideration under the plan. The government estimates that 4 to 5 million borrowers will be eligible for this program. Details regarding qualification and procedures for this refinance program are expected to be released in coming weeks.
Second, the government will increase its commitment to Fannie Mae and Freddie Mac from $200 billion to $400 billion and will raise the portfolio size limits for the two firms by $50 billion each. In addition, the government pledged to continue to support purchases of mortgage-backed securities to help keep mortgage rates low.
The third program provides incentives for servicers to work with borrowers at imminent risk of default to modify the terms of the mortgage, bringing payments down to affordable levels. If successful, the government hopes to prevent an estimated 2 to 3 million foreclosures, which would keep these homes from adding to the inventories currently on the market.
If you would like to find out more, please feel free to call Andy Hodes, he would be happy to speak with you regarding the Chattanooga Housing Market. Andy can be reached at 423-664-1818.
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Improved Conditions to Begin in 2009
Categories: Chattanooga Market Conditions, Chattanooga Real Estate News, Mortgage and Finance
By Angel Sherlin, Greater Chattanooga Lending
Conforming mortgage rates ended 2008 at the lowest levels in decades. One reason is that inflation is not a concern right now due to the current economic weakness and the decline in energy prices. In addition, the Fed has begun to purchase mortgage-backed securities (MBS), increasing the demand. Mortgage rates are generally determined by the price of MBS. On November 25, the Fed announced a plan to purchase as much as $500 billion in MBS, and mortgage rates have dropped significantly since the announcement. Low inflation and Fed purchases of MBS are expected to continue in coming months.
Along with low mortgage rates, homes have reached their best level of affordability in many years, according to the National Association of Home Builders (NAHB). The NAHB index compares the cost of paying for a home, based on average home prices and mortgage rates, to the median household income. Increased affordability allows more people to participate in the housing market, which should boost demand for new and existing homes.
The consensus outlook is that the economy will begin to improve during 2009. In addition, both the Mortgage Bankers Association (MBA) and the National Association of Realtors (NAR) expect the housing market to improve next year. The NAR predicts that both the number of existing home sales and home prices will increase in 2009. The combination of a rebounding economy, low mortgage rates, and affordable home prices provides good reason to expect an improved housing market in 2009.
For more information please call Andy at 423-664-1818 or send an email to Andy@AndyHodes.com.
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Worst MLS Photo this week in Chattanooga
Categories: Ask Andy, Chattanooga Market Conditions, Chattanooga Real Estate News
By David Israel, Business Manager
When getting ready to prepare a home to be placed on the market, Andy Hodes & The Scenic City Team stresses clearing out the clutter and making your home presentable to the public on the internet and when they walk through the door. Below is our candidate for worst MLS Photo this week in Chattanooga
The only thing worse than a bad picture is NO PICTURE at all.
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Mortgage Rates Improve
Categories: Chattanooga Market Conditions, Mortgage and Finance
By Angel Sherlin, Greater Chattanooga Lending
While the headlines were focused on the poor performance of the stock market, mortgage rates improved moderately during a volatile week. Mortgage rates were helped by a couple of factors. Seeking to reduce risk, investors sold stocks and moved the funds into relatively safer Treasury bonds and government guaranteed mortgage backed securities. In addition, slower economic growth and lower energy prices reduced expectations for future inflation. More good news for the housing market came from the September Existing Home Sales report, which rose 5.5% from August to the highest annual rate since August 2007.
Another important development was a decline in Libor rates during the week. Libor rates are viewed as a primary indicator of credit market conditions. They are also an important benchmark for setting the rates on many consumer loans, including adjustable-rate mortgages. Libor rates shot higher during the credit crisis when financial institutions became reluctant to lend money to each other. The broad series of recent government actions brought Libor rates down closer to more normal levels.
A series of government officials made statements during the week, including Fed Chief Bernanke, former Fed Chief Greenspan, Treasury Secretary Paulson, and FDIC Chairman Bair. The common theme is that the government is ready to take further actions as needed to support the economy and financial markets. Broad support was seen for a second fiscal stimulus package. The decline in the housing market was a key factor in causing the credit crisis, and many proposals are under consideration to help stabilize the housing market and prevent foreclosures. The bottom line, though, is that it will take some time for economic conditions to improve.
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Stocks Fall Further
Categories: Chattanooga Market Conditions, Chattanooga Real Estate News, Mortgage and Finance
By Angel Sherlin, Greater Chattanooga Lending
This week the stock market fell to the lowest level since 2003. Normally mortgage markets improve during a 
stock market decline, since Fannie Mae, Freddie Mac, and Ginnie Mae mortgage backed securities (the vehicles through which most mortgages made today are sold) are considered a relatively safe haven. This week, however, the prices paid for these securities moved lower as well. One reason is that some investment funds have been forced to reduce their leverage and sell nearly every asset class in their portfolios. Another factor is investor concern that the supply of debt will increase significantly as the government funds its rescue actions. Mortgage rates ended the week moderately higher.
Investors viewed the $700 billion rescue plan passed last week as a necessary first step, but not an immediate solution to the credit crisis. Governments around the world took a variety of additional steps during the week to support the banking system. A historic coordinated interest rate cut from many central banks took place on Wednesday. The Federal Reserve lowered the Fed Funds rate by one half point to 1.50%, citing reduced inflationary pressures due to an economic slowdown and falling energy prices. The Fed Funds rate heavily influences short-term interest rates, but its impact on long-term mortgage rates varies based on inflation expectations. In this case, the Fed rate cut most likely helped move mortgage rates a little lower, but the factors described above had more influence.
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Andy Hodes - “Realtor Extraordinaire - Part II” On Chattanooga Radio
Categories: Ask Andy, Chattanooga Market Conditions
Andy Hodes - “The Local Economist”
Below is a link to the second part of an interview with Andy conducted by Richard Winham of WUTC 88.1, Friday August 22, 2008. This was part series entitled “Around and About,” a Public Affairs Program on the University of Tennessee at Chattanooga’s Radio Station, an NPR Member Station. This interview was done in our office and aired several weeks ago. The topic was more about Andy Hodes and his decision to pursue a carrier and succeed in Real Estate! This interview is about 7 minutes long. We welcome all comments, ENJOY!
Andy Hodes on the Radio - CLICK HERE
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